Performance management the right way
The integrated performance management system
The best performance management system is the organisation-wide integrated performance management system. It can also work in isolation for a department, a section or on a personal level as long as the implementer understands the meaning of “integrated”.
A definition of “integrated” can be clarified as follows: “To make into a whole by bringing all parts together; unify and combining or coordinating separate elements so as to provide a harmonious, interrelated whole; organized or structured so that constituent units function cooperatively”.
If you cannot see a danger coming your way, you cannot take counter moves to avoid or eliminate it. You can make all the great plans and strategic decisions, but if you cannot properly see whether it is working, you cannot rectify the problems. If you are on a hunting trip somewhere and concentrating on aiming at your target, but unaware of the lion creeping up on you from your backside, you are most likely to be eaten alive.
It is hard to drive a car in heavy rain as one’s vision can be impaired. Likewise it can be hard to drive a business when you do not have the right insights, in which case the business may drive you into looming dark alleys with no exits into brilliant light. The integrated performance management system (IPMS) can provide the solution for clarity of vision.
With more than 2000 performance management systems in use worldwide, it is no wonder that employees get disillusioned and disengaged with all the subjectivity embodied in many of the systems.
1. What is performance management?
According to Wikipedia performance management can be described as follows:
Performance management (PM) includes activities that ensure that goals are consistently being met in an effective and efficient manner. Performance management can focus on the performance of an organization, a department, employee, or even the processes to build a product or service, as well as many other areas.
Performance management as referenced on this page is a broad term coined by Dr. Aubrey Daniels in the late 1970s to describe a technology (i.e. science embedded in applications methods) for managing both behaviour and results, two critical elements of what is known as performance.
This is used most often in the workplace, can apply wherever people interact — schools, churches, community meetings, sports teams, health setting, governmental agencies, and even political settings – anywhere in the world people interact with their environments to produce desired effects. Armstrong and Baron (1998) defined it as a “strategic and integrated approach to increasing the effectiveness of organizations by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors.”
It may be possible to get all employees to reconcile personal goals with organizational goals and increase productivity and profitability of an organization using this process. It can be applied by organisations or a single department or section inside an organisation, as well as an individual person. The performance process is appropriately named the self-propelled performance process (SPPP).
First, a commitment analysis must be done where a job mission statement is drawn up for each job. The job mission statement is a job definition in terms of purpose, customers, product and scope. The aim with this analysis is to determine the continuous key objectives and performance standards for each job position.
Following the commitment analysis is the work analysis of a particular job in terms of the reporting structure and job description. If a job description is not available, then a systems analysis can be done to draw up a job description. The aim with this analysis is to determine the continuous critical objectives and performance standards for each job.
Managing employee or system performance facilitates for the effective delivery of strategic and operational goals. There is a clear and immediate correlation between using performance management programs or software and improved business and organizational results.
For employee performance management, using integrated software, rather than a spreadsheet based recording system, may deliver a significant return on investment through a range of direct and indirect sales benefits, operational efficiency benefits and by unlocking the latent potential in every employees work day (i.e. the time they spend not actually doing their job). Benefits may include:
Direct financial gain:
Reduce costs in the organization
Stop project overruns
Aligns the organization directly behind the CEO’s goals
Decreases the time it takes to create strategic or operational changes by communicating the changes through a new set of goals
Optimizes incentive plans to specific goals for over achievement, not just business as usual
Improves employee engagement because everyone understands how they are directly contributing to the organisations high level goals
Create transparency in achievement of goals
High confidence in bonus payment process
Professional development programs are better aligned directly to achieving business level goals
Improved management control:
Flexible, responsive to management needs
Displays data relationships
Helps audit / comply with legislative requirements
Simplifies communication of strategic goals scenario planning
Provides well documented and communicated process documentation
In organizational development (OD), performance can be thought of as Actual Results vs Desired Results. Any discrepancy, where Actual is less than Desired, could constitute the performance improvement zone. Performance management and improvement can be thought of as a cycle:
1. Performance planning where goals and objectives are established
2. Performance coaching where a manager intervenes to give feedback and adjust performance
3. Performance appraisal where individual performance is formally documented and feedback delivered
A performance problem is any gap between Desired Results and Actual Results. Performance improvement is any effort targeted at closing the gap between Actual Results and Desired Results.
Other organizational development definitions are slightly different. The U.S. Office of Personnel Management (OPM) indicates that Performance Management consists of a system or process whereby:
1. Work is planned and expectations are set
2. Performance of work is monitored
3. Staff ability to perform is developed and enhanced
4. Performance is rated or measured and the ratings summarized
5. Top performance is rewarded
Wikipedia also has a description of “Business Performance Management“.
2. Why is there a need for performance management?
The efficiency of machinery or a system can sometimes obliterate the inefficiency of people. This means that unproductive employees can sometimes just ride along with the productive machinery. It also means the organisation is not running on peak productivity or peak performance.
Machinery does not have feelings, emotions, fears or thinking capabilities, which can distract it from its course of operations. As long as it is maintained in good shape, it can deliver a constant production rate, without getting tired.
Human beings, on the other hand, are diverse and complex beings, with their own interests, attitudes, personalities, perceptions and agendas, which they bring with them to work. That is why we study psychology, to treat, motivate, manage and lead them in spiritual ways. In doing so, we must bear in mind the main purpose of the organization for being in existence. So, however diverse and complex us human beings are, we are bound by the common goals of our organization. That is why you hear about goal setting, bench marking, performance and appraisals; all instruments to encourage us to achieve job goals. But all these things are not about the person, but the tasks at hand by that person.
If you do not have a good control mechanism over tasks at hand, people will dwindle off in their own directions, because of their complexities as human beings. If we prefer not to control, it is synonymous with being disloyal to your employer, who is paying for your services to curtail unproductiveness.
Extracts from an e-book titled “Why the need for Performance Management as a system?”, written by an unknown author.
“Performance management (PM) is the process of managing the execution of an organization’s strategy. It is how plans are translated into results.
PM escalates the visibility of quantified outputs and outcomes – in other words, results. PM provides explicit linkage between strategic, operational, and financial objectives. It communicates these linkages to managers and employee teams in a way they can comprehend, thereby empowering employees to act rather than cautiously hesitate or wait for instructions from their managers. PM also quantitatively measures the impact of planned spending, using key performance indicators born from the strategy map and balanced scorecard.
Everyone recognizes that employee teams are very knowledgeable in their own space. When management communicates to them what is wanted, employees can reply with an understanding of what initiatives it will take and how much it will cost. Internal politics and gaming are replaced by the preferable behaviour of employees taking responsibility like independent business owners.
Employees are creative, innovative, and driven if they know an objective or goal is obtainable. But too often, senior managers put forth unrealistic goals without having validated the fundamental financial, process, or resource requirements needed to achieve them. Operational systems were designed with a different purpose, thus contributing to their false promises as analytical solutions. In order to successfully set and reach goals, managers and employee teams must be able to create accurate, feasible plans and budgets that will support and drive goal achievement.
Employees are intangible assets. The knowledge of workers who go home each night and return in the morning is what produces value in many organizations today. A simple definition of this type of intangible asset, in contrast to a tangible asset, is something with potential that grows with time, rather than depreciates.
The sources of value creation are in people’s know-how and their passion to perform.
Human resource systems need to acknowledge employees as valued intangible assets, each with unique skills and experiences.
Inevitably management must come to grips with increasing bottom-line by getting more from its existing resources rather than removing them with layoffs. This imperative adds to the interest in performance management.
An economy with intangible assets as its primary source of economic value creation requires new forms of strategic direction, measurement, decision analysis, and organization. The formalization of PM as a discipline is central to these new forms.
PM integrates operational and financial information into a single decision support and planning framework. What makes today’s PM systems so effective is that work activities – what people, equipment, and assets do – are foundational to PM reporting, analysis, and planning. Work activities pursue the actions and projects essential to meet the strategic objectives constructed in strategy maps and the outcomes measured in scorecards.
PM combines the increasingly accepted strategic frameworks, such as the balanced scorecard, with intelligent software systems that span the enterprise to provide immediate feedback, in terms of alerts and traffic-lighting signals to unplanned deviations from plans. PM provides managers and employee teams with the ability to act proactively, before events occur or proceed so far that they demand a reaction.
PM applies to managing any organization, whether a business, a hospital, a university, a government agency, or a military body – any entity that has employees and partners with a purpose, profit-driven or not. In short, PM is universally applicable.
PM is the process of managing the strategy.”
PM also breeds collaboration between teams and departments.
I had received information from the Chief Executive of the Performance Management Association that there are more than 2000 different performance management systems in use worldwide.Some of those systems are being used in isolation and not coupled to a strategic planning process (SP). It is also a fact that some organisations do not even use the strategic planning technique. They do not have a formal strategic plan for the organisation.
The question can be asked how valid and appropriate can some or most of those many different systems be? If strategic planning and performance management are mutually dependent on each other for successful outcomes, on the same level of importance as the simultaneous co-existence of the heart and blood to the human body, in other words the one cannot survive without the other, how valid can PM systems be without SP and how successful can SP be without a PM system?
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See this video:
3. Five Steps Toward A Performance-Driven Enterprise by Mark Stiffler : Synygy *
Enterprise Performance Management (EPM) improves performance by aligning the strategy and goals of the organization with employee objectives and competencies, variable pay, and real-time performance metrics and analytics.
Companies with forward-thinking leaders who strive to keep their organization’s competitive edge and ensure its long term success and viability embrace EPM because it provides a centralized tool to manage the full cycle of the intelligent business decision process based on real time factual data.
EPM begins with the strategic planning process and articulation of a vision for the organization. EPM continues with the development of top-level objectives and the cascading of these objectives along with criteria for performance throughout the enterprise. EPM is also about measuring performance and linking pay to performance and then analyzing results and adjusting the strategy—creating a process of continuous improvements in workforce productivity.
STEP ONE: DEFINE STRATEGY AND VISION
Strategy is the structure that steers the decisions that form the future character and essence of an organization. The first step in the EPM process is defining the strategy—setting a clear vision and direction of what the enterprise aspires to become in the future.
STEP TWO: DEVELOP TOP-LEVEL OBJECTIVES
Strategic planning, on the other hand, is the process of defining top-level objectives—how the enterprise will deliver its strategy. This process identifies key performance perspectives or indicators that can be visible to, shared by, and communicated to the entire workforce.
The results of the strategic planning process should be a list of strategic business goals categorized into performance perspectives. These goals form the basis for the objective setting process throughout the enterprise hierarchy.
STEP THREE: SET OPERATIONAL-LEVEL OBJECTIVES
A cascading objective process allows you to “operationalize” the top-level objectives, by translating the strategic business goals identified in the strategic planning process into a series of measurable objectives that relate to the various levels of the organizational hierarchy such as enterprise, business unit, division, department, team or individual.
These objectives and the associated targets form the basis for the organization’s ability to measure and monitor the progress of achieving the key strategic goals.
To cascade the objectives effectively across the enterprise operating units and provide a clear and focused emphasis for each type of role (or position), a framework for the distribution of the various levels of objectives must be established into all parts of the organization.
STEP FOUR: MEASURE PERFORMANCE AND LINK TO PAY
When this process is complete, every participant ends up with a scorecard, illustrated by a set of objectives, measures, and weights. This scorecard represents a roadmap set by the enterprise for each employee to follow and adhere to during a specific time period.
Employees who perform well and impact company results positively expect to be rewarded in a fair and equitable manner for their efforts. Equitable rewards foster job satisfaction and high morale. Motivated and happy employees are loyal and will remain committed to the long-term success of the enterprise.
STEP FIVE: ANALYZE RESULTS AND ADJUST STRATEGY
The regular analysis of information that comes out of the performance management process is critical to making changes and improving performance. The key is providing executives and managers with a new perspective on performance—one that is real time, instead of after the fact.
Now it’s possible to know instantly when a key performance indicator exceeds, varies, or fails to meet established levels, and managers can reduce the time required to identify a problem, notify appropriate personnel, and take necessary action to achieve desired performance.
This real time access to performance information is critical to making necessary adjustments in strategy and allows executive decision-makers the ability to quickly adapt to changing market conditions. This ability then becomes a highly sustainable competitive advantage.
A well-executed EPM process provides the enterprise with a competitive advantage – nimbleness and agility to leave competitors behind. Most companies already have the technological structure needed to support an EPM initiative, such as ERP software solutions, financial and analytical tools, online analytical processing (OLAP) models, data warehouses, and data transformation tools. Investments in EPM solutions have typically yielded positive returns within a 6 to 12 month timeframe.
* Balanced scorecard: Translating strategy into action, by Robert S. Kaplan and David P. Norton. Harvard business school press, 1996.
See also “The integrated performance management system” below.
Career development is mostly described as a process of career planning or leadership pipeline planning, which can take up lots of wasted time before one ever experience any advancement. It can be a long process. However, the shortest route for career advancement is embedded in the implementation of an integrated performance management system in one’s own work environment.
This is the sort of system which can drive businesses into the top 300 or top 500 best companies on a country or worldwide basis. Performance management the right way, is explained in the video tutorial displayed below, with the title “Performance Management the right way – when the integrated performance management system becomes a self-propelled performance process”. It is intended to be a Blueprint for The Corporate World like its Chief Executives, Senior Managers and Middle Managers. The video tutorial on “performance management the right way”, gives answers to questions like how to rescue a business, how to turn a business around, how to reach top listings, how to improve results, how to survive a recession, how to evaluate PM software packages and how to make the strategic plan alive for all employees, how to turn a Government department around, how to turn a Government from near bankruptcy to surpluses.
See this introductory review:
Jim Donovan wrote a best seller titled “This is your life, not a dress rehearsal”, in which it is set out how to live your dreams. The best action one can take to influence one’s own career and destiny is revealed in the video below. If you are serious about your career, please take a look at this video:
Performance Management the right way videos:
* How to rescue a business?
* How to turn a business around?
* How to reach top listings?
* How to improve results?
* How to survive a recession?
* How to evaluate PM software packages?
* How to make the strategic plan alive for all employees?
* How to turn a Government department around?
* How to turn a Government from near bankruptcy to surpluses?
What else is included?
A transcript in PDF as a full-fledged training manual, so one can print out all the forms, diagrams and explanations for easy reference, scrutiny and use.
Performance Management the right way training manual:
Broad subjects covered:
Productivity principles and how to measure it
How employees can cripple productivity and profits with excessive undetected costs
Professional job descriptions
Short interval self-control cycles
Performance areas and Performance indicators
Critical, continuous and key objectives and indicators
Definition of performance appraisal
Purpose of performance appraisal
Sources of measurable criteria
Frequency of measurement
Scientific design of objectives and standards, including detailed examples
Three scoring methods
Management control reports
The mature appraisal
Evaluation of development areas
Rest assured, this model is spot on with authoritative research by several worldwide institutions and Universities, but less lumpy, easier to understand and easier to implement with a more direct approach.
4. Performance Management Outline:
Nowadays, a great significance is being given to Performance Management, as companies incorporate it in their effective management strategies. However, a lot of people find this process a complicated one, mostly because of the many options that it offers – on the organization, a specific department/branch, a product or service, and on employees, among others.
In order to minimize this confusion, the items below will give you a general idea of what Performance Management is all about as well as the activities that are involved in this process.
What is Performance Management?
Performance management is a process that provides both the manager and the employee (the person being supervised) the chance to determine the shared goals that relates to the overall goals of the company by looking into employee performance.
Why is it important?
Performance Management establishes an outline for employees and their performance managers to assess and to come to an agreement on certain concerns and aims that are in accordance with the overall structure of the company. This enables both parties to have clear objectives that would help them in their work and in their professional growth.
Who conducts Performance Management?
Performance Management is carried out by those who oversee the performance of other people – work/team leaders, supervisors, managers, directors, or department chairs.
What are the processes involved?
Below are the phases of the Performance Management process:
This phase of the Performance Management process includes establishing job descriptions and identifying the employee’s essential functions as well as defining the strategic plan/s of the department or the company as a whole.
A job description is used to advertise a vacant position, which typically specifies the following:
– The specific functions, tasks, and responsibilities of the position
– The amount of time needed to act upon each function
– The qualifications needed (skills, knowledge and abilities) to perform the job
– The physical and mental requirements of the position
– Salary range for the position
– To whom the position reports
Job descriptions should be disclosed to the employee as soon as he or she is hired. Note, however, that job descriptions are listed using words that make it difficult to measure the employee’s performance. They are in contrast with competencies, which list the skills needed in performing such tasks and are described using terms that can be measured.
In effect, a strategic plan tells you three things:
– Where the company is heading in the coming year/s.
– How the company is going to get there.
– How the company will know if it is already there or not.
Included in a strategic plan are the following:
– Mission statement – the primary reason why your department (or company) exists.
– Goals – associated with the mission statement, they determine the results that will advance said statement/s.
– Strategic initiatives – specifies definite steps that must be taken to accomplish each goal. It is a dynamic process, usually examined during periods such as one or two years.
This phase of the Performance Management process includes developing performance standards, which offers a scale that describes how a specific job should be performed in order to meet (or exceed) expectations. They are explained to newly hired employees and are later used to evaluate work performance.
Performance standards are generally outlined with the help of the employees who actually perform the tasks or functions. There are a number of advantages with this approach:
– The standards will be suitable to the requirements of the job
– The standards will be applicable to actual work conditions
– The standards will be easily understood by the employee (and performance manager as well)
– The standards will be acknowledged (and received) by the employee and the performance manager
Standards of performance are usually in the form of ratings (1 to 5, A to E) that are used by performance managers to rate the employee’s actual level of performance.
This phase of the Performance Management process includes monitoring employee’s work performances and giving feedback about them.
As the basis of feedback, observations should be verifiable: they should involve noticeable and work-related facts, events, behaviours, actions, statements, and results. Feedback of this type is called behavioural feedback, and they help employees improve and/or sustain good performance by precisely identifying the areas that the employee needs to improve without judging his or her character or motives.
This phase includes conducting performance evaluations. This is the critical aspect of the Performance Management process, especially because it is important for performance managers to arrive at an unbiased assessment.
A performance appraisal form has the following features:
– Employee information
– Performance standards
– Rating scale
– Employee performance development recommendations
– Employee comments
– Employee’s Self-appraisal
Why conduct performance appraisals? It provides an opportunity to improve performance in the future not only for employees, but for managers as well. Performance appraisals enable managers to acquire information from employees that will help them make employee’s jobs more productive.
4.5 Development Planning
This phase of the Performance Management process includes establishing plans for improved employee performance and development goals. This advances the overall goal of the company and at the same time increases the quality of work by employees by:
– Encouraging constant learning and professional growth.
– Helping employees maintain the level of performance that meets (and exceeds) expectations.
– Improving job – or career-related skills and experience.
In closing, Performance Management is a process that, when executed fairly and effectively, can improve the quality of the company’s workforce, raise standards, increase job satisfaction, and develop professionalism and expertise that would benefit not only the employees but the entire organization as well.
5. Many organisations have a misguided perception of performance management:
They only think that they have a performance management system in place. We are talking here about a system where an organisation attempts to do a performance evaluation once or twice per annum.
The typical procedure is that the employee does a self-evaluation, which is then compared to the evaluation of the Supervisor. They then both agree on a comfortable midway and the end result is usually an above average score for most employees.
In the meantime all performance facts are ignored, because they were not recorded on a weekly or monthly scorecard and forgotten and ignored during the once-off subjective evaluations.
The truth of the matter is that there is complete lack of short interval control, lack of performance and lack of developmental growth.
The end result is that everybody is happy, non-the-wiser and receives the same merit increase.
The organisation then even publish in the annual report that they have a sophisticated performance management system in place, thereby bluffing and lulling themselves and the Board Members into a false sense of complacency.
Ignorance can make the whole party happy, without signs of real performance ever being reached or observed.
With some organisations performance management can be an occasional event and with others it can be a way of life, interwoven in daily work activities.
If performance management is not formally incorporated in the normal meeting infrastructure of an organisation, it is stillborn and will never have a significant impact on organisation improvement or on human behaviour or human performance.
On the subject of effective meetings, research findings indicate that when a performance control meeting also becomes a problem-solving event, it undermines the goal with the performance control meeting. Problem-solving efforts should rather be conducted through special meetings or project teams.
The culture of performance must be a living thing in an organisation. It must be seen, felt and on the minds of every employee every working day. It is no good to have everything in writing, filed and buried somewhere in a cabinet file nobody lives by.
The great challenge for organisations is to progress from occasional backward looking performance appraisals based on historic performance, to regular forward looking performance management based on continuous corrective actions at a differentiating shorter control and planning time scale for each hierarchical level (planning, controlling and reporting according to the Sergeant Stripes Principle).
The strategic plan becomes alive through continuous short interval corrective actions.
Key questions in establishing how healthy a performance management system is being applied:
– What are the negative highlights of the latest external audit report?
– What internal overtime hours were necessary for completion of the external audit report?
– Is there a strategic planning process?
– Is there a strategic plan?
– How is the strategic plan used for operational procedures?
– How are strategically planned goals manifested in job descriptions?
– How are achievements of strategic goals monitored throughout all hierarchical levels?
– Are individual job performance regularly monitored against job goals?
– How are deviations from job performance standards being corrected on a daily and weekly basis?
– Are continuous key, continuous critical and specific performance areas and associated key, critical and specific performance indicators built into a balanced score card or performance matrix for each job?
– Is the performance appraisal form generalised and the same for all employees or groups? In other words, are the elements being measured coupled to specific, differentiated job task outcomes, which are being measured regularly? Remember, employees are doing different jobs with different tasks. How effective can a generalised form be?
6. Our integrated performance management system:
To become an expert in integrated performance management principles requires one to go through a lot of study material, seminars, courses, latest subject research findings, implementation trials and experience. While there are many consultants and organisations giving themselves out as experts in the field of performance management, they are very seldom able to convey the complete solution to the puzzle. We, on the other hand, have developed a unique, copyrighted, integrated performance management system.
Our integrated performance management system always aligns itself to the organisation strategic plan and the system encourages, impels and inspires employees to perform in those job activities they are supposed to excel in, according to their strategic derived job descriptions and special projects.
Performance of each job is also aligned to the hierarchical differentiation of management roles, functions and tasks.
We make use of a scientifically designed model for the analysis, design and implementation phases of the unique integrated performance management system.
This integrated performance management system also automatically brings forth job descriptions, with continuous key, continuous critical and specific performance areas and associated key, critical and specific performance indicators or key result indicators, for use in the balanced score card or performance matrix, for ease of performance measurement, performance evaluation and performance corrections, on a regular basis.
The integrated performance management system also encourages short interval self-control by each employee on each hierarchical level, to minimise the control function and control frequency, by each consecutive higher-level manager, so that supervision and control over subordinates become almost self-regulatory.
The integrated performance management system was designed to make organisation improvement a breeze. Any organisation can implement this integrated performance management system to improve clarity of vision, job purpose, employee motivation, employee morale, productivity and profitability.
It must be stressed that this integrated performance management system is not for the faint-hearted or organisations and people not interested in higher productivity or better performance.
Top management must be serious about improvement and maintain and uphold the system for a stress-free experience in automatic and continuous self-improvement by every employee.
The system provides automatic solutions for many problems inside organisations and for many frustrations facing employees, chief executives and business owners. It is an automation system, converting many organisational processes to autopilot.
The direct benefits of the integrated performance management system are: employee attitudes make a 360 degree turnaround, better co-operation between employees and between departments, job descriptions stay current, performance measurement becomes transparent, merit ratings and merit increases become transparent, profit bonuses become transparent, individual and organisation productivity increase, individual and organisation performance increase, the management functions become more automated and self-regulatory, organisation efficiency and effectiveness increase, shorter management meetings with less lost time and dramatic organisation profit growth.
The indirect benefits of the integrated performance management system are: less employee frustrations, less employee stress, less sleepless nights for all, less in-fighting, less arguing, less political jostling, less supervision, less worries, higher employee motivation, continuous growth in employee self-improvement and higher employee morale.
The “integrated” part of the description in “the integrated performance management system” means it integrates or merges the existing organisation infrastructures like the specific organisation strategic planning process, the job commitment declarations, the job descriptions, the performance measurement, the organisation planning, organising, controlling, reporting, directing, budgeting and management meeting processes, into one unified, coherent, streamlined, management system. The mystifying management puzzle then suddenly becomes crystal clear.
The integrated performance management system can be utilised by an individual on a personal level, a section, a department or the whole organisation. It is not a computer software program, although it can be computerised, but a “how to manage system”, with specific document layouts.
Benefits for subordinates:
1. They know exactly what goals to achieve and strive for.
2. They know first of deviations, which call for corrective actions.
3. They can take remedial action before they have to report on performance progress.
4. They know exactly, which performance factors will be measured for possible bonuses and merit increase evaluations.
5. They are better equipped with updated information to control their immediate job environments themselves.
Benefits for Supervisors and Managers:
1. They spend less time on supervision over subordinates.
2. They have more time for exploring the environment and for planning improvements.
3. They have more time for development of subordinates.
4. They have more time for improvement of section and departmental performance.
5. They are better equipped with the latest figures to report upwards on performance progress.
Benefits for the Chief Executive:
1. He is constantly updated with more reliable figures on overall performance progress.
2. He is in a better position to evaluate overall subsidiary or company performance progress.
3. He stays ready with updated information, which makes reporting to the Board of Directors faster and easier with less effort.
4. His vigilance over the maintenance of the system, ensures more time to all levels for better planning of performance improvements.
5. He and his team of Senior Managers stay better equipped for regular strategic planning sessions.
Benefits for the Organisation:
1. The remuneration and promotion practices become more transparent and justifiable.
2. Higher employee morale, dedication and motivation.
3. Higher organisation productivity and profits.
4. Higher competitiveness.
The coveted hidden secret ambitions of individuals to make money:
All working human beings have dreams ranging from attainable to wishful thinking, which they do not readily share with other human beings, not even with their closest friends or loved ones.
Some dream of starting an own business of which only a few ever succeed in doing it. Some dream of changing a career path, but only a handful ever manage to succeed with it.
Almost all human beings, who have not yet fallen into a money mint, have the common dream of making more money for various and different reasons. This common dream of riches is the reason why casinos, lotteries and all sorts of betting enterprises are enormously profitable. They thrive on the money-making dreams and ambitions of the not so wealthy part of the population in the world. Granted, some take part in these high risk activities only for the pleasure and stress relief they get from it. The underlying ambition to make money, however, still remains in the subconscious mind.
A search on Google reveals that 217 000 000 businesses are competing for the search phrase of “how to make money”, while worldwide searches by individuals for the same phrase are 1 500 000 per month, which is huge. For the search phrase “how to make money online” there are 205 000 000 competitors for 135 000 searches per month. For the shorter keyword phrase “make money” there are 6 120 000 searches per month.
Here are some other relevant searches with results: “How to build a career” – insignificant, “how to get a promotion” – insignificant, “job performance” – 74 000, “performance improvement” – 110 000 and “performance management” with 550 000 searches per month. If one assumes that the first three search phrases mentioned here are by individuals on a personal level as employees and the last two by individual managers from an employer perspective, then the deduction can be made that employees are more interested in making a fast buck or yearning for something else. In other words employees are not so much interested in carving a long-term career path for improvement of living standards, but rather want to look for ways to make money faster.
There can be many reasons for this general lack of interest in job performance by employees like:
- they do not see a future for themselves;
- it takes too long to get a promotion;
- there are too many other competitors;
- present remuneration is only holding them on a survival path from month to month;
- job enrichment opportunities are too low to develop skills faster and keep them interested;
- they do not know the secrets or hidden knowledge of how to make money as employees; and
- many other reasons.
Is this type of thinking “a job is a job is a job, but I am secretly pining for something better” not common in most individual employees?
A recent survey by Forbes showed that about 50% of employees are not satisfied with their work. “A lot of unhappy workers are staying put. But if employers want an upbeat, engaged workforce, they need to find ways to help employees feel challenged and rewarded by work. A couple of suggestions: offer more training and education. Also it pays to try to find a path up the ladder for current employees, and to help them know it’s available to them.” See it here.
In another survey South Africa ended up second last on productivity at 143 out of 144 countries, meaning South Africa is almost the worst in the world.
What is the reality in the world?
While making hordes of fast money may be quite difficult if not near impossible, it is quite possible to get regular salary increases through job promotions. This type of steady money-making on the job can become quite significant in the long run and is in the reach of anybody with a little job dedication and perseverance, combined with the right tools and knowledge. We named it “the essentials for perpetual job promotion – a blueprint for all career paths”, which in essence is the utilisation of our integrated performance management system. It can be used for personal benefit (apply it to your good self), for a section, for a department or the whole organisation.
The coveted hidden secret ambitions of individuals to make money, may after all not be so difficult. First make some steady money on the job, to be able to make more money faster with the help of the job-generated money. After all, the means to achieve this are right under our noses. We must just be able to see how it can be done and everything can be seen right here.
Here in the diagram below, you can see the schematic illustration of the major parts of the integrated performance management system:
Strategic planning sessions and Bush conferences (“Bosberade”) usually bear little or no fruit, if it is not backed up by a solid performance management system to monitor and ensure that those strategic conclusions and decisions made, are achieved. Then those strategic decisions tend to dwindle away from memories over time, making the original good intentions, time spent and costs incurred a total waste of effort.
7. Productivity index:
It is important that every organisation, department, section and employee must have a positive productivity index. Productivity is measured by dividing output by input.
For instance, if you monetize the total output of an organisation in terms of value of all goods and services produced over a certain period and divide that figure by the total cost of production, the positive productivity index must be one or more. If it is equal to one, it means that the organisation is breaking even. If it is more than one, it means the organisation is making a profit, because the organisation is then getting back more than what it spends.
Output value divided by input value = productivity index.
Sometimes production machines, processes or technologies can be so efficient and effective that it can compensate for the inefficiency and ineffectiveness of human labour. However, each cost component must be evaluated on its own merit for continuous improvement.
In the same manner the impact of every jobholder must also be calculated to ensure a positive index for each individual employee. The productivity index per employee then becomes the monetary impact of individual efforts, divided by total cost to the organisation, to arrive at the per capita productivity index.
The big question everyone in an organisation must ask and answer is: “Am I giving more back to my organisation (in the form of monetary impact of efforts) than what I take out of the organisation as total monthly remuneration (total cost to company)?” This is the question, which can make many overcompensated employees very uneasy and worried about their positions and make them start to consider the benefits of a performance management system or try to avoid it at all costs.
If you as a person do not have a positive productivity index, it can then be said that you do not make a positive contribution to the organisation; in other words you are a loss for the organisation. To put it another way: The organisation is then making a loss on their investment in you.
Unfortunately the per capita productivity index for humans cannot be calculated. There is, however, one certain way of ensuring that you have a better productivity index and that is by installing and maintaining a performance management system.
Dwindling organisations are also being turned around to greater profitability by means of a performance management system.
More effective meetings: The results of a survey in the UK show that the average office worker spends around 16 hours in meetings each week and that around a quarter of this time is usually wasted. That’s four hours of pointless meetings every week.
Over a year, this works out to more than 200 hours – or almost nine full 24-hour days. Over a career, the total is even more alarming with the average worker sitting through around 9,000 hours of needless meetings – a full year and ten days spent twiddling their thumbs.
For workers in the public sector, the time spent in pointless meetings is even higher. Civil servants spend an epic 22 hours a week in meetings with one third of that time estimated to be surplus to requirements.
According to another survey, employees globally spend an average of 5.6 hours a week in meetings. 69 percent of participants feel that these meetings are unproductive and unnecessary. Not only is the mental cost of these meetings high, they also affect a company’s bottom line. These weekly 5.6 hours of unproductive time is like giving each employee 12 additional days of paid vacation per year. In fact, Group Vision estimates that Fortune 500 companies waste an estimated $75 million per year in meetings. The numbers clearly make the case that meetings are costly beyond their value.
Why do meetings have a bad reputation? Meetings dominate the way in which we do business today. In fact, approximately 11 million meetings occur in the U.S. each and every day. Although many of us complain about meetings, we can all expect to spend our careers deeply immersed in them. Most professionals attend a total of 61.8 meetings per month and research indicates that over 50 percent of this meeting time is wasted. Assuming each of these meetings is one hour long, professionals lose 31 hours per month in unproductive meetings, or approximately four work days. Considering these statistics, it’s no surprise that meetings have such a bad reputation.
Some organisations have many types of meetings like safety, hygiene, production, maintenance, quality control, budget, finance and others.
When we implement our integrated performance management system, only one type and set of meetings replaces all other meetings in the whole organisation, saving endless hours of unnecessary wasted time.
8. How the integrated performance management system can reduce the unemployment rate:
It is general knowledge that the systems model of a business describes how resources are used and utilised through a conversion process to produce outputs.
Likewise, in monetary terms a financial equation can be used to describe how profits are made. The total of sales less the total cost of input resources used equals total profit.
Sales – Cost = Profit
The total cost of resources usually consists of the following cost elements:
Cost of capital
Cost of human capital
Cost of material
Cost of services
Cost of taxes
As long as there are disposable profits, it can be used to finance capacity expansions and the forming of new enterprises, which in turn lead to more appointment of employees. So we see that anything, which can be detrimental to profits, whereby profits are reduced, can directly reduce eventual employment. For instance, if taxes go up, profit will be lower; as well as available cash on hand for expansions and new ventures.
On the other hand if taxes can be reduced, profit will climb higher; as well as cash on hand for expansions and new ventures leading to higher employment.
As the integrated performance management system is used to plan, monitor and improve all the cost elements in an organisation, it can directly help to improve the employment rate through higher profits.
9. The Balanced Scorecard:
Another name for balanced scorecard is performance matrix, which we use in our training. Both are exactly the same thing. In our leadership development training manual it is an important part of leadership essentials. However, in the total content of leadership development, it is only one of many other aspects, which are being covered.
The training you will get here stretches over 12 months in the first year and thereafter it is ongoing to other topics for which you do not pay anything again. The Leadership Development Training Manual comprises many aspects of which the balanced score card is just one of the essential topics. In our course we call it the performance matrix. What is the difference between our system and the Balanced Score Card Methodology? It boils down to the same thing. Our Performance Matrix Methodology is, however more user friendly and more flexible. In addition, we cover a much wider field, which includes professionalism in management and leadership skills as well.
10. Performance management quotes:
1. “A strategy without a system leads nowhere”.
2. “A system without a strategy leads nowhere”.
3. “A system without goals leads nowhere”.
4. “Poor control is equal to hope for the best”.
5. “Absence of a performance management system is equal to gross negligence of duties”.
6. “Absence of performance management leads to non-performance”.
7. “Absence of performance management equals squandering of employer money”.
8. “Performance management uplifts work culture and work ethics”.
9. “Management skills and capabilities are reflected in subordinates’ performance levels”.
10. “Management efficiency is evidenced by employee attitudes and productivity levels”.
11. “Leadership effectiveness is reflected by subordinates’ reverie and respect for the boss”.
12. “If employees do not contribute more value than their cost to their employer, the organisation will turn stale, sick and bankrupt in terms of human effort”.
13. “If the human capital of an organisation or department do not contribute more value than their cost, then that organisation or department is not viable in terms of human effort”.
14. “Government departments are mainly about service delivery by humans to humans, so they must always weigh up the value of service delivery with the total cost of existence”.
15. “If a Government department cost is higher than the value of its service delivery, then it is equal to squandering tax payers money”.
16. “If a Government body is negligently under-performing, it must be liable for any consequential damages, losses or sufferings caused to inhabitants they serve”.
17. “The King recommendations and regulations regarding responsibilities of Company Directors should be expanded to include Government Departments and all types of bodies in between”.
18. “When a private company becomes inefficient, it closes down; when a government body or semi-government body becomes inefficient, it just slurps up more taxes”.
11. What is wrong with capitalism nowadays?
If Governments grow out of proportion by numbers, greed or corruption, they must increase taxes and decrease public benefits to pay for those bloated salaries, benefits and corruption. The middle class is normally the ones who suffer because of it. A proper performance management system the right way, will show up pockets of idleness where workforce deployments must be re-arranged or reduced, either by numbers or remuneration. Sometimes Governments must take stock of remuneration levels and do man loading exercises to establish required workforce levels. Performance management the right way, will automatically identify over employment in workforce levels. Are these perhaps some of the reasons that are crippling the “American Dream” and the dreams of citizens in many other countries? Should a Government not also be “lean” and “mean” like what is expected in the private sector? Has the tendency not become one of Governments trying to build themselves into mighty, expensive and unaffordable Kingdoms and thereby impoverishing middle classes and forcing Countries into bankruptcy?
Individuals from some cultural backgrounds tend to shy away from controlling the work results of subordinates, which is required by performance management. People sometimes confuse the control of work results with control of persons, which of course is not the case. The reality is, however, that if a Supervisors’ underlings do not perform, that Supervisor’s performance will also be adversely affected. A Supervisor or Manager can only be as strong as the subordinates make him or her. This whole question of perform or not perform, boils down to making choices in life for a better or worse future for all. Is the performance management system of the organisation favouring evaluation of personality traits rather than task outcomes or both?
In light of the fact that there are more than 2000 different performance management systems in use worldwide, as mentioned previously in this article, it has become overdue to change the biased and degrading interpretations of performance management to a positive concept of “human talent growth mindset development”.
The necessity of a formal performance management system can become less important, when the majority of the workforce of an organisation becomes mature enough to replace the formal system with a personal self-driven informal monitoring system. In other words, it can be abandoned, when individuals have received ample internal/external training to apply all the elements of a performance management system automatically themselves on an individual basis, without being officially forced to do so. However, how many can lay claim to this type of knowledge and maturity?
13. View the first video of a series of 6 videos with the training manual transcript:
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